Gov. Linda Lingle yesterday vetoed a bill that would have prohibited the state Department of Labor and Industrial Relations from implementing any administrative rule changes to workers' compensation laws.

LINDA LINGLE

The Republican governor called the measure a "handcuff bill" designed by Democrats to tie the hands of her labor director, Nelson Befitel. Democrats say an override may be in store and accused Lingle of overstepping boundaries and trying to go around the legislative process.

Lingle said her administration has tried to change Hawai'i's workers' comp system, which has among the highest premiums in the nation and is a key concern for local businesses. The system was a strain on employers and did not allow workers who are injured on the job to expeditiously get the treatment they needed to get back to work, she said.

Lawmakers, however, rejected the proposals. So Befitel made the changes through administrative rule changes, which were adopted May 13 after public testimony.

The Legislature responded by passing a bill saying the labor department cannot adopt new rules between Jan. 1 of this year and July 1, 2007.

"(The bill) nullified the rules that we just adopted to improve the workers' comp for workers and businesses. It did this by rewriting history," she said.

House Labor Committee Chairman Kirk Caldwell, D-Manoa, said the governor "clearly" overstepped her authority and is trying to legislate through rule making, which goes against checks and balances of government.

"Even if I agreed with the rules, I think as a legislator, we can't stand and allow the executive branch to intrude onto the territory on the legislative branch and legislate through rule making, and she's definitely doing that here," Caldwell said.

He said the Democrat-controlled House will have enough votes for an override, but that he is uncertain whether two-thirds of the Senate will follow.

Caldwell said the Democrats' bill was intended to preserve rules that have been functioning for workers' comp for the past decade.

"It's not rewriting anything. It's keeping in place what has been working, as opposed to her rules, which are a dramatic change from where we were before," he said.

Lingle said Befitel did what any of her directors do when they hit a roadblock in the system: "They looked for another way."

Lingle estimates the workers' compensation rule changes would save businesses about $100 million annually. Caldwell said he wants proof of that.

The vetoed bill would have amended workers' compensation laws, including mandating further requirements for vocational rehabilitation providers, limiting the state labor director's rule-making authority and specifying procedures for filing of claims.

Lingle said the bill prevents Befitel from making improvements at all, "even if you find a way to make things better for working people in our state. Even if you find a way to make this system fairer for businesses. You cannot do it."